HomeResearchThe development opportunities of Manufacturing Industry in China in the future for Foreign-funded Enterprises

The development opportunities of Manufacturing Industry in China in the future for Foreign-funded Enterprises

April 26, 2018

Posted by: Yolandy

Miao Wei, the Minister of Industry and Information Technology, stated that China will adhere to the “Made in China 2025” and related policies and measures for all enterprises in China, including domestic and foreign-funded enterprises. And will reduce institutional transaction costs effectively, strengthen intellectual property protection, and create a stable, fair and transparent business environment for the global investors.Manufacturing has always been the key industry for foreign investment. According to statistics, in 2017 China’s manufacturing industry had been newly established 4,986 foreign-invested enterprises, which was a year-on-year increase of 24.3%. The newly revised “Industrial Guidance Catalogue for Foreign Investment (2017)” has greatly reduced the restrictions on foreign investment access. At the same time, overseas investment by Chinese companies has also shown strong growth in recent years. Manufacturing accounts for over one-third of the total overseas investment, covering textiles, food, machinery, automobiles, electronics and many other fields.The extent of full opening of China’s manufacturing industry has been formed and continuously deepened. It will further implement the opening requirements for automobiles, ships, aircrafts and other industries, relax restrictions on foreign investment ratios, especially the ratio of foreign capital shares in the auto industry, and strengthen the connection with international trade rules and regulations for foreign investors. Provide more and better investment opportunities for foreign investors.Recently, the National Development and Reform Commission announced the opening schedule of the automotive industry, further clarified the degree of opening up of the auto industry: in 2018, will cancel the ratio of foreign shares of special vehicles and new energy vehicles; in 2020, will cancel the restrictions on foreign capital shares in commercial vehicles; and in 2022, will cancel the restrictions on foreign capital shares in passenger cars in 2022. Through a five-year transition period, the automotive industry will completely remove such restrictions.As for China’s open policy towards the automotive industry, Dudenhofer, an automotive industry expert at the University of Essen-Duisburg in Germany, said: “For auto companies, this is a huge step towards the future.” According to the data from German Machinery Manufacturing Associations, the German automobile market sharing in China has reached 20%. Since foreign car companies can carry out their own development routes in the future instead of negotiating with their partners, Dudenhofer believes that more foreign car companies will enter the Chinese market in the future and will not only be in the production sector, but also will include technology research and development.

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